Singapore O&G gets S$0.295-a-share takeover offer from vehicle linked to Dymon Asia

Singapore

CATALIST-LISTED healthcare service provider Singapore O&G Group has received a voluntary unconditional cash offer at S$0.295 a share from special purpose vehicle NewMedCo Group, according to a bourse filing on Monday (Mar 7).

Singapore O&G, which has 4 operating segments of obstetrics and gynaecology (O&G), paediatrics, cancer-related general surgery, and dermatology, provides healthcare services in Singapore and Malaysia.

The offeror NewMedCo is a consortium consisting of the offer's sponsor and promoters.

The offer's sponsor, Hanaan Health Group, is majority-held by a special purpose vehicle that is in turn wholly-owned by Dymon Asia Private Equity (SE Asia) II. According to the filing, its business is to invest in or acquire corporations in the healthcare sector.

Meanwhile, the promoters are Singapore O&G's executive chairman Beh Suan Tiong, its executive director Heng Tung Lan, and 3 specialist medical practitioners employed by the group - Lee Keen Whye, Joyce Lim Teng Ee and Choo Wan Ling. In total, they own around 71.4 per cent of the issued shares in Singapore O&G.

As at the offer announcement, the company has an issued and paid up share capital of S$28.1 million, comprising around 476.1 million shares.

NewMedCo said it intends to make Singapore O&G its wholly-owned subsidiary and does not intend to preserve its listing status.

It expects privatisation to give it and the management of the company more flexibility in managing its business, optimise the use of its management and capital resources, and facilitate the implementation of any operational change.

Noting that the trading volume of Singapore O&G's shares have been generally low, the offeror said this presents shareholders a "clean cash exit opportunity to realise their entire investment in the shares at a premium over the prevailing trading prices of the shares without incurring brokerage and other trading costs".

The offer price represents a premium of around 15.7 per cent over the last transacted price of S$0.255 on Mar 3, 2022, being the last full market day on which the shares were transacted prior to the offer announcement.

When compared to the benchmark prices of the shares up to and including Mar 3, the offer price also represents a premium of around 14.8 per cent over the counter's volume weighted average price (VWAP) for the 1-month period, 12.2 per cent over 3 months, 11.3 per cent over 6 months and 11.3 per cent over 12 months.

Furthermore, NewMedCo said it expects that Singapore O&G will be unlikely to require access to Singapore equity capital markets to finance its operations in the foreseeable future as it may tap other funding sources such as bank borrowings.

A delisting will also enable the company to save on expenses relating to the maintenance of a listed status and focus its resources on its business operations, the offeror said.

NewMedCo added that subject to normal business conditions, it does not intend to make major changes to the business of the company or its management team, re-deploy its fixed assets or discontinue the employment of its employees.

The offer document is expected to be sent out in 14 to 21 days.

Shares of Singapore O&G last traded at S$0.25 before the company called for a trading halt on Friday (Mar 4).